While prices have since declined, they remain highly volatile as supply struggles to catch up with rising demand.Ĭonsumer inflation in the US touched 7.9 per cent in February, a 40-year high, as gas, food and housing prices soared across the country.
Oil prices climbed to almost $140 per barrel earlier this month, a 14-year high, after the US banned Russian oil imports to penalise Moscow for its military invasion in Ukraine and the UK said it would phase out imports of Russian crude during the course of the year. Here is a rundown on the potential impact of the US releasing crude stockpiles on oil markets and why it matters. The move marks the third time the country has tapped into its strategic reserves in the past six months, following 50 million barrels released in November 2021 and 30 million barrels in March 2022 as part of the pledge by International Energy Agency members to unload 60 million barrels from emergency stocks to stabilise energy markets. Control of both chambers of Congress and dozens of governorships and state offices are on the line. President Biden and his Democratic party have been criticised by rival Republicans because of the rising costs and high oil prices in the advent of the 2022 Midterm Election, the first national election since Donald Trump was defeated. The decision to roll out crude stockpiles comes as President Joe Biden faces the lowest approval rating of his presidency (40 per cent), according to the latest Reuters/Ipsos poll, stalled nuclear negotiations with Iran and the US seeking to control inflation that hit a 40-year high. This will provide a signal of future demand and help encourage domestic production today," it said. The Department of Energy will use the revenue from the release to restock the SPR in future years. "This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up. "The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time," the White House said in a statement on Thursday. In early trading on Friday both futures edged lower with Brent trading at $104.30 and WTI trading at $99.63.
West Texas Intermediate, the gauge that tracks US crude, was trading 4.06 per cent lower at $103.44 a barrel. The move represents the largest release since the SPR was set up after the 1970s oil embargo.įollowing the news, Brent, the global benchmark for two thirds of the world's oil, was down 4.65 per cent at $108.17 per barrel at 7.10pm UAE time on Thursday. The US will start releasing 1 million barrels of oil a day from its strategic petroleum reserve (SPR) over the next six months, as the world's largest oil producer seeks to rein in soaring inflation and lower crude prices.
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